Wesfarmers supermarket sales up, discounters down

RhiannonHoyle

SYDNEY--Australian conglomerate Wesfarmers Ltd. (WES.AU) reported higher sales in its supermarket and home improvement stores in its fiscal third quarter, although the retail giant said it faced difficulties attracting customers to its Target discount stores as it reined in promotional deals.

Perth-based Wesfarmers Tuesday said food and liquor sales from its Coles supermarket chain rose 3.9% on-year to 6.7 billion Australian dollars (US$6.2 billion) as the unit continued to cut grocery prices and upgraded its stores. The company has battled Woolworths Ltd. (WOW.AU) for dominance of Australia's supermarket sector, employing tactics such as cutting the price of milk and other staple goods while expanding the range of its own-label products to help boost loyalty.

Sales in its home improvement stores in the three months through March were meanwhile 12% higher than the year-earlier period, at A$2.1 billion, it said in a stock exchange filing.

Still, sales at Target fell by 3.6% on-year as moves to reduce the company's reliance on heavy discounting deterred customers. "The business continued to reposition its offer towards less promotional dependence with a view to securing long-term, sustainable growth," Managing Director Richard Goyder said in the statement.

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